2012年-CEPS欧洲政策研究中心_The_Trade_50页_396kb

Summary of "The Trade-Induced Effects of the Services Directive and the Country-of-Origin Principle"

Core Content

This paper examines the trade and welfare effects of the European Commission's 2004 proposed Services Directive, with a special focus on the country-of-origin principle (CoOP). The study uses the WorldScan general equilibrium model to simulate the economic impacts of implementing the directive, both with and without the CoOP.

Main Viewpoints

• The Services Directive is expected to significantly increase intra-EU trade in commercial services by 30 to 60%, depending on the inclusion of the CoOP.
• The country-of-origin principle plays a crucial role in enhancing trade effects. Without it, the increase in trade would be 20 to 40%, and the associated welfare gains would be lower.
• The directive aims to reduce regulatory barriers, eliminate unnecessary restrictions, and facilitate the free movement of services across the EU.
• The welfare effects of the directive include a 0.3 to 0.7% increase in GDP and a 0.5 to 1.2% increase in consumption for the EU as a whole.
• The economic benefits are not uniform across all Member States, with newer Member States expected to gain more due to higher regulatory barriers in their service sectors.

Key Information

Trade Effects

• The directive is designed to remove trade impediments in the service sector, which are mainly due to national regulations.
• Non-tariff barriers are a major cause of these impediments, including licensing requirements, residence restrictions, professional qualifications, and local compliance.
• The country-of-origin principle allows service providers to operate under their home country's regulations when delivering services in other EU countries, reducing the cost of compliance and trade costs.
• The impact of the directive is estimated to be 30–60% increase in bilateral trade in commercial services, and 20–35% increase in foreign direct investment.

Welfare Effects

• The directive is projected to increase GDP by 0.3–0.7% and consumption by 0.5–1.2% in the EU when implemented with the CoOP.
• If the CoOP is excluded, the welfare gains would be lower, with GDP rising by 0.2–0.4% and consumption by 0.3–0.7%.
• These gains are attributed to three main effects:
  1. Dismantling real trade barriers.
  2. Positive trade-of-terms effects.
  3. Improvement in allocative efficiency.

Country-Specific Effects

• New Member States are expected to benefit more from the directive due to higher regulatory barriers in their service sectors.
• These countries tend to import more services and specialize in manufacturing, leading to significant gains from reduced trade barriers.
• Older Member States like the Netherlands, Germany, Ireland, and Austria also experience larger than average gains due to specialization in services and reduced regulatory heterogeneity with key trading partners.

Regulatory Heterogeneity

• The directive is expected to reduce policy heterogeneity across the EU.
• The heterogeneity indicator measures the degree of regulatory differences between countries.
• The impact of the directive is analyzed across five sub-domains of product-market regulation:
  • Regulatory and administrative opacity
  • Explicit barriers to trade and investment
  • Administrative burdens for start-up firms
  • Barriers to competition
  • State control

Model and Methodology

• The WorldScan model is used to estimate the general equilibrium effects of the directive.
• The model simulates the impact of reducing non-tariff barriers using Armington demand functions.
• The regulatory heterogeneity is calculated based on 184 policy items from the OECD International Regulation database.
• The estimated heterogeneity parameters show that regulatory and administrative opacity and explicit barriers to trade and investment are heavily affected by the directive, with expected reductions of 66–77% and 73–78%, respectively.

Conclusion

The implementation of the Services Directive, particularly with the country-of-origin principle, is expected to boost intra-EU trade and investment in commercial services, leading to positive welfare effects. The economic gains vary across Member States, with newer members benefiting the most due to higher regulatory barriers. The directive's success depends on mutual recognition and trust in national regulatory standards, which are central to the country-of-origin principle.

Key Figures

• Trade increase: 30–60% with CoOP, 20–40% without CoOP.
• GDP increase: 0.3–0.7% with CoOP, 0.2–0.4% without CoOP.
• Consumption increase: 0.5–1.2% with CoOP, 0.3–0.7% without CoOP.
• Regulatory heterogeneity reduction:
  • Regulatory and administrative opacity: 66–77%
  • Explicit barriers to trade and investment: 73–78%
  • Administrative burdens for start-ups: 34–46%
  • Barriers to competition: 29–37%
  • State control: 3–6%

Annexes and References

• The paper includes three annexes:
  • Annex 1: Bilateral trade increase in other commercial services.
  • Annex 2: Model characteristics.
  • Annex 3: Macroeconomic effects (constant returns).
• The references include the OECD International Regulation database and previous CPB studies on the free movement of services within the EU.

Authors and Contributors

• The paper is written by Roland de Bruijn, Henk Kox, and Arjan Lejour.
• Ali Aouragh, Nico van Leeuwen, and Gerard Verweij provided research assistance.
• The deputy director of CPB, Casper van Ewijk, is acknowledged for his support.